Types of Family Financial Traditions
To some degree or another, we are all a function of the social environments in which we were raised. Of course, that encompasses both positives and negatives. When it comes to money, the first exposure we have to its management is in our families. That makes good money management practices a real gift that parents can pass on to their children.
Don’t Buy Your Kid a Car for Nothing
The greatest motivator there is for a teenager is freedom and their path to that freedom is a car. When you buy your kid a car, rather than supporting him or her to learn to earn money to buy the car him/herself, you are overlooking one of the greatest opportunities you have to support your child to learn to be self-sufficient.
If you have an extra car available for your child, at least require your child to pay for the gas and insurance, which will support him or her to begin to be prepared for the requirement of life in the future, when you aren’t there to provide for all the needs they have. Make them earn it somehow, is the bottom line.
Kids Playing the Stock Market?
Introducing children to the stock market is not a far-fetched idea. There is plenty of information available that can be understood by kids. First off, children are very aware of products — toys and games like the CashFlow Board Game, for example. They can be introduced to the fact that the companies that make these toys are owned by people like their parents, who hold shares of stock. From there, they can be shown the daily stock prices and how they change. As they grow older, your children can begin making small stock purchases and become comfortable with investing.
Family Vacation Saving
Family vacations are usually looked back on fondly and may even be considered family traditions. Saving during the year, by children as well as parents, for an annual vacation can also be part of that tradition and help teach good money management techniques. Whether it be from jobs kids have like grass cutting or babysitting, or just from allowance savings, it will serve children well later in life to have learned the value of setting money aside for a deferred pleasure.
If you give to charity regularly, you may want to consider setting up a private foundation that can be used to consolidate your giving plus be used to educate your children about investing (all of the assets of the charitable foundation need to be invested) and giving.
Read the story of Bob and Wendy Graham, of the Namaste Foundation, and how they used charitable giving via a private foundation to educate the kids and create cohesion and connection in their blended family. If you’d love a free copy of this short book, please give us a call and we’ll send you an ebook as a our gift.
Involve your children in your estate planning as soon as they are old enough to understand. They will feel secure knowing you’ve planned well for what would happen to them, if and when something happens to you. Have them meet the lawyer they will work with, tell them about how they will receive their inheritance and when. And, begin to talk now about how you can increase the overall family wealth you have and how you want to be cared for by them at the end of your life.
If you feel uncertain about how to approach these issues, contact us. Or read the books Die Wise, Being Mortal and Family Wealth: Keeping It in the Family, all books that inform our personal process as your family lawyers.
Supporting your children to think like entrepreneurs can be one of the greatest gifts you give them. As the world shifts, we are moving into a new economy in which reliance on traditional jobs no longer provides the security they once did. Technology will replace many of the jobs people relied on in the past and the only real security going forward is resourcefulness, creativity, and community, all of which is learned via the path of entrepreneurship.
Consider reading the book The Last Safe Investment by Bryan Franklin and Michael Ellsberg for some more ideas on this topic.
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At KCKW Law Firm, we are committed to becoming your personal family lawyers. For more information, call our office today.